Queensland leading nation in strength of building approvals

Queensland builders are set to capitalise on the best conditions in six years, with a 26.9 per cent increase in building approvals in Queensland 2015. The figures from the Australian Bureau of Statistics, released in February, showed the fourth consecutive monthly rise in trend building approvals for Queensland - 2155 more houses were approved for building in December, up 13.4 per cent in November and the largest month since January 2010. NSW and Victoria trail behind with a 26.7 percent increase and an 11.9 per cent increase respectively. We've gathered a few industry opinions on the news.

Queensland State Treasurer Curtis Pitt

Pitt higlighted the key drivers as an increase in the number of approvals for units, townhouses and apartments, as well as houses, especially in the south-east corner. Additionally, he reported that Queensland has "a significant pipeline of apartment projects", which along with the recent increase in house approvals, will support dwelling construction in Queensland in 2016.

“In 2015 a total of 48,936 new dwellings were approved – every one of them providing jobs for our State’s building industry and tradies.

“This compares to the 38,572 dwellings approved in 2014 — the last full year of the previous Government.

“That’s a 26.9 per cent increase in 2015. This compares with NSW, which had a 26.7 per cent increase and Victoria, which only had an 11.9 per cent increase.”

AV Jennings Chief Executive Peter Summins

Listed and private builders are reporting strong sales. AV Jennings reported on Monday that it had booked a 39.2 per cent increase in interim profit as buyers surge into its housing estates, with Queensland being among the best of the states. Revenue grew 57.9 per cent to $187.2 million after contract signings rose 14.6 per cent.

The developer's main focus on traditional housing markets - much of that is in greenfield estates - had protected it from the volatility of the inner-city high-rise market.

"Supply and demand for capital city high density housing has significantly increased in recent years and is likely to decrease in the short term."

"However, there are no signs of an over supply in the proven traditional housing sector, comprising medium density and detached housing, in which the company operates."

Villa World Managing Director Craig Treasure

Villa World has just spent another $32 million buying land south of Brisbane for another 726 lots as it gears up its exposure to south-east Queensland.

"We see Brisbane in the process of catching up to where the other states have been – the only question is whether the state can keep up the jobs growth," said Villa World managing director Craig Treasure.

"There has been no trouble following the change in macro prudential regulation on bank lending and the low interest rates are helping owner occupiers. I can also say that there are very few people in the north and south of Brisbane who want to downsize into an apartment close to the city. They still want a backyard."

Tessa Build Founder Brendan Tutt

Smaller new builders are entering the market and enjoying the business, like Tessa Build who expect to construct 200 new homes this year.

"We have started 24 builds over the last 12 weeks," Mr Tutt said. "What we are seeing now is a balanced shift and growing interest in detached housing.

"Brisbane will traditionally follow Sydney trends eventually and what we are seeing now is true to this, the reality is our market in Brisbane still has a very strong medium term outlook and we believe stock quality, builder and local knowledge are going to be the key."

Mr Tutt claimed banks have also become more willing to fund land developments. ""Land developments can be a long process and banks can look at them with caution but the banks now have a stronger appetite for land."

Ray White Land Marketing (Queensland) Director Jamie Martin

More buying activity has increased the demand from builders and developers for marketing and sales.

"We are continuing to see strong buyer demand for vacant land lots in south-east Queensland and an increase in lot registrations across Brisbane, Gold Coast, Ipswich, Logan, Moreton Bay, Redlands and the Sunshine Coast."

Industry trends remain an important indiciator of the factors that will affect your project pipeline and business growth. We talk more about the benefits of infrastructure-watching and other tips in our free download, 4 tips to help increase your chances of winning hire work. Check it out by clicking the image below!

Author's Note: The quotes from Peter Summins, Craig Treasure, Brendan Tutt & Jamie Martin first appeared in an article from the AFR.

As the Content editor at plantminer.com.au, Sophia works behind the scenes to keep our blog machine in motion. A student of Law and Business, she's very dependent on coffee and loves any excuse to travel.